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A, B and C share profits in the ratio 2:3:5. C retires, and the new profit-sharing ratio of A and B is fixed at 5:5. What will be the gaining ratio of A and B?

Answer and explanation

Correct answer: ३:२

Under the old ratio, A’s share was 2/10 and B’s share was 3/10. Under the new 5:5 ratio, each receives 5/10. Therefore, A’s gain is 5/10 − 2/10 = 3/10, while B’s gain is 5/10 − 3/10 = 2/10. Hence, the gaining ratio is 3:2. Exam tip: Calculate each partner’s gain as new share minus old share; the new ratio itself is not the gaining ratio.

Related tags

Gaining RatioPartner RetirementNew Profit Sharing RatioAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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